Hosted software applications refer to applications that are stored remotely and accessed over an internet. A hosted application is typically stored on a server of a hosting company and downloaded to a local computer of a customer company when used. Hosted software applications allow a customer company to delegate the responsibilities of maintaining the software application.
One type of software application that may be hosted is a customer relationship management (CRM) application. However, typical CRM applications pose several obstacles to cost-efficient hosting.
A CRM application is an enterprise-wide application that allows companies to manage aspects of customer relationships. A typical CRM application provides a set of business objects (entities) and a set of business processes (processes) that operate on the entities. Entities represent a distinct matter of importance to a business. Entities may include, for example, contacts, accounts, or the relationship between them. Processes operate on and across one or more of the entities and define possible states and transitions of the entities. Processes may include, for example, an account setup process for opening a new account.
Typically, CRM application includes a suite of sales and service functionality referred to as base CRM functionality (base CRM). The base CRM applications can be specialized or tailored to address the needs of a specific industry. Such industry-specific CRM applications are referred to as vertical CRM applications (verticals). Moreover, a base CRM application or a vertical may be tailored to address the needs of the particular customer company using the application. Such highly tailored applications require additional computational or storage resources for the application to manage additional information regarding company-specific entities and processes.
In a conventional, non-hosted, environment, the CRM application is installed at a location specific to the customer company and these additional costs can be attributed to the customer-company.
A customer-specific CRM application may employ components of one or more verticals. For example, a CRM application specifically tailored for a large automotive dealer may include components of an automotive vertical for processing automotive accounts and services as well as components of a financial vertical for managing loans. For such, highly tailored CRM applications, employing components from multiple verticals, difficulties arise in maintaining consistency of shared data across verticals. For example, for a tailored CRM application employing components of an automotive vertical and a financial vertical, vehicles and loans may each be considered products and changes to either entity may affect both.
Again, for non-hosted CRM applications the associated cost of maintaining consistency of shared data is borne by the particular customer company. The tailoring is effected only if the functionality is sufficiently valuable to the particular customer company.
As noted above, hosting CRM applications provides a number of advantages for a customer company. Such advantages are even greater when the hosted CRM application is a highly tailored vertical application. A hosting company that provides highly tailored vertical applications is likely to be of greater interest to potential customer companies than a hosting company that provides only a base CRM functionality.
However, the characteristics of highly tailored verticals discussed above make hosting such applications problematic for the hosting company. Hosting companies rely on economy of scale provided by efficiently sharing resources with multiple customer companies. Highly tailored CRM vertical applications may be customer-specific or at most applicable to a small number of customer companies. Hosting multiple individual highly tailored verticals is incompatible with the economies of scale necessary to make hosting a financially attractive endeavor. That is, currently, to provide a highly tailored vertical to multiple customer companies requires multiple software systems and servers.
Moreover, the inability to differentiate customer companies based upon their respective resource usage in order to provide accurate cost assessment (billing), is an additional problematic area in hosting highly tailored verticals. That is, a practical implementation for hosting highly tailored verticals should allow for differentiated cost assessment proportional to resource usage that is unavailable with current hosting schemes.